Reassessment validity depends on tangible material linking alleged fictitious transactions to the assessee; suspicion alone is insufficient.

Reassessment based on alleged fictitious share transactions requires recorded reasons showing a clear reason to believe, supported by tangible material and a discernible link to the assessee; mere suspicion is insufficient. Where the recorded reasons and rejection of objections do not establish that the assessee entered the transactions or claimed the alleged loss, and the underlying information is not furnished despite request, the reopening cannot be sustained. On these facts, the reassessment under section 147 was held invalid and the related addition was deleted.

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Issues: Whether the reassessment was valid when the recorded reasons did not specifically link the alleged fictitious share transactions to the assessee and the assessee was not furnished the underlying information, and whether the addition made on that basis could be sustained.

Analysis: The reopening must rest on recorded reasons showing a clear "reason to believe" based on tangible material, with a discernible link between the information received and the assessee. Mere suspicion is insufficient. The recorded reasons and the rejection of objections did not establish, with any supporting material, that the assessee had in fact entered into the alleged purchase transactions or claimed the alleged fictitious loss. The assessee's request for the details of the information relied upon was not met, and the assessment proceeded without substantiating the alleged transactions through material specific to the assessee.

Conclusion: The reassessment under section 147 was held to be invalid, and the addition made on that basis was deleted.

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